The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

What We Need Is More Manufacturing

In 1950, manufacturing jobs employed one-third of America’s workforce. Today we’re down to one-tenth of Americans holding manufacturing jobs. The pace of that decline sped up in the last decade or so.

There are two reasons: (1) increases in productivity and (2) globalization.

The majority of jobs lost in the last decade come from productivity, not outsourcing. This is the same kind of revolution that took Americans out of agriculture and looking for work elsewhere.

Today’s flight is from goods production to service sector jobs . . . but so far the growth hasn’t benefited the average American by as much, at least not when it comes to wages. (The only real benefit you see is the fact that a flat screen TV is so cheap—thanks to exported parts from Asia—you can sit on your couch and feel like a king!)

Let’s consider what goes into an iPhone. A look at where its guts come from shows you how we’ve racked up our trade deficit with the whole of Asia.

The iPhone’s screen comes from Japan. Taiwan sends on the battery chargers, camera lenses, and timing crystals, plus a bunch of chips from Taiwan Semiconductor Manufacturing Company. The video processing chip comes from South Korea. In all, nine countries produce the parts that are sent to China for assembly.

But wait, isn’t tech the category where we are still the leader? Labor in Japan or Taiwan isn’t cheap—not by a long shot.

Forget the old encouragement to buy American. It’s simply not possible any longer ...